Ceasefire talks pump up markets

USD: Sept '25 is Up at 97.660.  

Energies: Aug '25 Crude is Up at 64.99.

Financials: The Sep '25 30 Year T-Bond is Lower by 1 tick and trading at 114.22.

Indices: The Jun '25 S&P 500 emini ES contract is 7 ticks Higher and trading at 6148.00.

Gold: The Aug'25 Gold contract is trading Up at 3340.60.

Initial conclusion

This is not a correlated market.  The USD is Up and Crude is Up which is not normal, but the 30 Year T-Bond is trading fractionally Lower.  The Financials should always correlate with the US dollar such that if the dollar is Higher, then the bonds should follow and vice-versa. The S&P is Higher and Crude is trading Higher which is not correlated. Gold is trading Higher which is not correlated with the US dollar trading Up.  I tend to believe that Gold has an inverse relationship with the US Dollar as when the US Dollar is down, Gold tends to rise in value and vice-versa. Think of it as a seesaw, when one is up the other should be down. I point this out to you to make you aware that when we don't have a correlated market, it means something is wrong. As traders you need to be aware of this and proceed with your eyes wide open. All of Asia traded Higher.  All of Europe is trading Lower.

Possible challenges to traders

• Fed Chair Powell Testifies at 10 AM EST.  This is Major.
• New Home Sales are out at 10 AM EST.  This is Major.
• Crude Oil Inventories are out at 10:30 AM EST.  This is Major.

Traders, please note that we've changed the Bond instrument from the 10 Year (ZN) to the 2 Year (ZT).  They work exactly the same.

We've elected to switch gears a bit and show correlation between the 2-year Treasury notes (ZT) and the S&P futures contract.  The YM contract is the Dow Jones Industrial Average, and the purpose is to show reverse correlation between the two instruments. Remember it's likened to a seesaw, when up goes up the other should go down and vice versa.

Yesterday the ZT dived Lower at around 7:30 AM EST with no news pending.  The Dow climbed Higher at the same time. Look at the charts below and you'll see a pattern for both assets. The Dow climbed Higher at 7:30 AM EST and the ZT dived Lower at around the same time.  These charts represent the newest version of Bar Charts, and I've changed the timeframe to a 15-minute chart to display better. This represented a Short opportunity on the 2-year note, as a trader you could have netted about 20 plus ticks per contract on this trade.   Each tick is worth $6.25.  Please note: the front month for ZT is now Sep '25 and the Dow is now Sep '25.  I've changed the format to filled Candlesticks (not hollow) such that it may be more apparent and visible.

Charts courtesy of barcharts

ZT -Sep 25 - 6/24/25

Dow - Sep 2025- 6/24/25

Bias

Yesterday we gave the markets an Upside bias and the indices didn't disappoint. The Dow gained 507 points, and the other indices gained ground on the session.  Today we aren't dealing with a correlated market, and our bias is Neutral or Mixed.

Could this change? Of Course. Remember anything can happen in a volatile market.

Commentary

Yesterday morning there was talk of a ceasefire but there was also talk that Iran violated the agreement. This is still ongoing at this point but it's positive for the markets if a ceasefire actually took place and it appears that it has.